Banks aided byCDO unwinding

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Billions of dollars&rsquo; of collateralised debt obligations (CDOs) &ndash; securities backed by payments on mortgages, corporate loans and other debt &ndash; are being unwound, enabling financial institutions to clear toxic assets from their books. Many of these CDOs have defaulted but they can only be liquidated if the underlying collateral can be sold. Investors have been buying the underlying assets at deep discounts. Of the more than $500bn of CDOs backed by asset-backed securities sold in the boom years, $350bn have experienced an &ldquo;event of default&rdquo;.